With peak-load pricing,a firm charges a different price in each period,because:
A)its supply is perfectly inelastic.
B)its marginal cost of production varies in each period.
C)the number of consumers change every period.
D)the demand for the good is perfectly price elastic.

Question

Quizplus · Accepted Answer

With peak-load pricing, the firm charges a higher price during peak periods when the demand is high and a lower price during off-peak periods. This is because the marginal cost of production varies in each period due to factors such as increased demand for inputs or the need for additional capacity. Therefore, the best choice is B, as it correctly captures the reasoning behind peak-load pricing.

With Peak-Load Pricing,a Firm Charges a Different Price in Each